The Labor Party is being asked by the Property Investors Council of Australia (PICA) to be clear on the timeframe for implementation of its proposed negative gearing changes, in the event the party wins in the upcoming election.
This comes a week after the Real Estate Institute of Australia called out the party for announcing that there would be no decisions made regarding changes to existing negative gearing and capital gains taxation arrangements until after the federal election.
PICA Chairman Ben Kingsley said that the Labor Party may be having second thoughts about the policy due to dropping property prices in many locations around the nation. The planned reforms have been the foundation of its campaign for three years.
“Restricting negative gearing to new property was always a ridiculous so-called ‘solution’ to Sydney’s strong price growth, which has now well and truly dissipated because it was merely a sign of the peak of a market cycle. If the policy was absurd back then, it’s even more so now, with the national economy flat-lining due to a number of poor indicators, including significant property-price falls in our two biggest cities,” Kingsley said.
Kingsley said that the party needs to fully inform the public of its plans.
“The majority of every Australian’s wealth is in their property, so having the threat of their home’s value falling even further is no doubt part of the reason why our economy is in the doldrums,” he said.
According to Kingsley, both property owners and investors are fearful about the changes. Hence, if the introduction of these measures is scheduled as early as July this year, buyers need to have ample time to organise their finances and enter the market in the next few months to meet the deadline, he said.
